InformationWeek

he need for companies to focus on their customers has never been more critical or apparent than during these soft economic times. As companies cast about for the applications and strategies to assist them in that quest, the chief marketing officer has emerged as a fulcrum of those efforts. It's the CMO's role to execute tactical tasks, from sales support to marketing campaigns to ongoing advertising and public relations. The CMO must also pay careful attention to the company's market positioning and customer relationships.

The CMO's role also encompasses the use of technology to support business goals. Although product planning usually resides within the marketing department, product direction is increasingly dependent on and driven by technology. This, in turn, requires that marketing executives increasingly partner with IT or product development to assess product capabilities and set the company's strategic direction. A CMO's responsibilities vary significantly by industry and company. Business-to-consumer companies generally emphasize brand management, market awareness, and customer acquisition. Business-to-business companies often stress lead generation, business development, and sales support, reflecting their longer sales cycle and complex products and configurations.

Along with these functions, the chief marketing officer title is occasionally subsumed under other monikers. Companies in stable, slowly changing markets that wish to emphasize sales sometimes create a hybrid VP of sales and marketing position, providing urgency for sales initiatives (and adding direct revenue responsibility) but often detracting from long-term market strategy and positioning. Successful marketing organizations, by contrast, bring a focus on the customer to everything they do, using the currency of customer knowledge to give weight to their initiatives. Reflecting this trend, some marketing executives have recently co-opted the chief customer officer title to represent their growing ties to customer success.

However, chief customer officer positions usually don't come with the resources and budget needed to execute effectively on this new mission. Despite the title's initial appeal as a way to elevate the importance of the customer, naming a chief customer officer often will have the opposite effect, signaling to employees that customer satisfaction is someone else's problem. While the company's goals in creating such a position are often admirable, in reality, the chief customer officer can have subtle negative effects on the customer and the company's customer-relationship management initiative.

As for the business reporting structure, one can make a good case for having the CMO report directly to the CEO. The marketing officer plays a key role in developing company strategy and typically has a large staff along with significant budget responsibilities. The fact that CEOs are increasingly involved in public relations dovetails nicely. Reporting directly to the CEO also increases the marketing officer's clout and visibility. Any company planning a major marketing push should consider having the marketing officer report directly to the CEO.

Still, with few concrete success metrics and no line responsibility, marketing officers are often at the mercy of sales results, a factor that contributes to their average tenure of only 18 months in some industries. Consequently, marketing officers should worry less about where they report and more about how to quantify their contributions to customer success. We recommend taking four steps to more accurately gauge the effectiveness of marketing initiatives:

• Establish metrics for key marketing deliverables. Make metrics as measurable and customer-specific as possible, even in awareness activities. For example, don't just track the number of press mentions--track mentions in the publications high-value customers read most.
• Measure and track customer value. Customers are key company assets, so quantify lifetime value and the likely yield of key initiatives to gain company mindshare and expose revenue at risk.
• Focus on metrics that tie marketing deliverables to customer acquisition, retention, and other tangible increases in company value. Move away from tracking internal goals, such as number of leads and cost per lead, to externally focused metrics, such as the number of sales, new high-value customers, and customer retention.
• Use customer surveys, focus groups, and acquisition and retention patterns as critical measurement tools for overall customer health.

Staying focused on the customer is fundamental to the relatively new chief marketing officer function. There's already a growing awareness among these executives that their success--in fact, their very survival--ultimately depends on achieving satisfaction for their customers.

Robert K. Weiler is chairman, president, and CEO of Giga Information Group, a global technology advisory firm. You can reach him at gigaquestions@gigaweb.com. Erin Kinikin, VP of customer-relationship management at Giga Information Group, contributed to this column.